GST to create multiple taxation points for IT industry: Nasscom

The GST regime would streamline the taxation system and make it much more transparent, but would also create multiple taxation points, which will be a "challenge" for the IT industry, Nasscom said today.

Nasscom President R Chandrasekhar said the concerns regarding multiple taxation points have been brought to the notice of the government and it expects a positive response while framing the GST law. (Reuters)

The GST regime would streamline the taxation system and make it much more transparent, but would also create multiple taxation points, which will be a “challenge” for the IT industry, Nasscom said today.

Nasscom President R Chandrasekhar said the concerns regarding multiple taxation points have been brought to the notice of the government and it expects a positive response while framing the GST law.

“IT services are intangible. The way things are looked at in the GST law, not the Constitution amendment, there we have a number of concerns which have been shared with the government.

“We feel that today for IT services, it is a simple regime. One single point of taxation which is central service tax, one single point of registration, one single invoice, one single place where you have to go for any refund.

“Now under GST regime, it could be as high as 111 points because you have CGST (Central GST), IGST (Interstate GST) and SGST (State GST). We have 36 states and union territories. All put together, it becomes 111 different (taxation) points,” he told reporters on the sidelines of a programme here.

Chandrasekhar said moving from single to multiple points could be a challenge from the point of view of ease of doing business.

He said he met Finance Minister Arun Jaitley, who assured him that these issues would be looked into.

“What we are clearly given to understand is that post the Constitution Amendment Bill, serious discussions will take place on which all key service sectors will be impacted, notably the IT-BPM sector, telecom sector and BFSI sector. These are the service sectors which will have the maximum impact from the GST, which need special attention,” he added.